Party Funding Law to Be Revised

• Amendments to narrow circle of entities falling under the law’s regulations;
• Wording “directly or indirectly related” to be removed;
• Fines imposed by the state audit agency will be reduced;
• 0.2% of GDP cap on donations/spending to be amended;
• Courts to have more say over state audit agency’s decisions;

The authorities have agreed to amend a controversial party funding regulations after the ruling party accepted number of key recommendations from watchdog groups including the one envisaging narrowing circle of entities and individuals that may fall under the monitoring of the state audit agency’s unit in charge of political finances.

Lawmakers from the ruling party will initiate amendments to the law on political parties this week – less than three months after the controversial legislation was passed by the Parliament in late December.

Some of the details of the planned legislative amendments emerged during a meeting on March 19 between senior ruling party lawmaker, Pavle Kublashvili, and representatives from Tbilisi-based watchdog and legal advocacy groups, which have been actively campaigning in recent weeks for revision of the law.

Tamar Chugoshvili, a chairperson of the Georgian Young Lawyers Association (GYLA) – one of the groups campaigning for revision of the law, welcomed that their proposals “have largely been accepted.” 

The planned amendment will not apply to a provision which bans corporate funding to political parties and caps annual donation from an individual citizen at GEL 60,000.

One of the key demands of the campaign group was to narrow circle of entities and individuals which may fall under the regulation of the party funding legislation by limiting scope of such entities to those groups, which have “declared electoral goals” (instead of “political and electoral goals” as it is now formulated in the law) and which spend funds for achieving such goals.

The current formulation in the law applies restrictions set for political parties to extensively broad circle of organizations and individuals. The law now says that restrictions apply not only to such legal entities or individuals, which have declared political or electoral goals, but also to those, which are directly or indirectly related to a political party or are otherwise under the control of a political party. The law defines such potential linkage when a legal entity’s “expenses directly or indirectly are related to the activities or goals of a political party.”

This formulation, involving “directly or indirectly related” entities and individuals, will be removed from the planned amendments and replaced with wording offered by the campaign groups.

According to the planned amendment, the restrictions and provision of party funding regulations will also apply to those entities or individuals who will violate party funding rules for multiple times or those whose violation will involve an amount more than GEL 30,000.

The funding rules and restrictions, applied to political parties, will also cover such organizations, which will start campaigning for or against any candidate or a political group, according to planned amendments.

The amendment will specify, that restrictions set by the law will not apply to economic and entrepreneurial activities, as well as property rights and freedoms under the private law, if such activities have no electoral goals or if they are not conducted with a purpose to bypass restrictions set by the law.

The amendment will also specify that no restrictions will apply to organizations whose activities are directed towards supporting political parties’ institutional building and whose activities do not involve campaigning for or against any political force. The proposed provision is directed towards western donor organizations, which provide assistance to political parties in Georgia.

Existing law says that restrictions envisaged by this legislation cannot be used against freedom of expression and civil engagement; the planned amendment will also add to this list right of “pre-election agitation”.

The planned amendment will also revise a provision which currently says that total annual spending, as well as annual income of a political party or a legal entity or individual “related” to a party received whether from donations, membership fees, state funding or any other legally permitted sources, should not exceed 0.2% of country’s annual GDP recorded in a previous year.

The new wording of this provision will set 0.2% of GDP restriction only for annual spending and cap will be removed in respect of annual income. The new formulation will also remove from the current provision a wording which speaks about entities and individuals “related” to political parties and replace it with “political union/electoral subject”.

The planned amendment will require a party to notify the state audit agency about a received donation within five days, instead of current three.

The amendment will also downsize amount of fines imposed by the state audit agency in case of violation of provisions of the law. Currently the agency is authorized to order a financial penalty ten times the amount of the illegal donation. The proposed amendment will decrease it to five times the amount of the sum involved, but in case of repeat violation the state audit agency will still be able to impose fine ten-fold of the sum involved.

The planned amendment will also involve additional provisions aimed at specifying and clarifying the state audit agency’s authority, as well as at increasing the role of judiciary in respect of the state audit agency’s decisions.

The state audit agency will still have the right to impound a property of an entity involved in violation of the law, but the planned amendment will specify that such a move should be proportional to violation, meaning that the state audit agency will have no right to impound the entire property of an entity for a minor violation and in this case only part of the property, proportional to the violation, can be impounded. 
 
According to the planned amendment, the state audit agency will have to immediately notify about its decision on violations to the court. Court of first instance should consider and rule into the state audit agency’s decisions, such as on imposing fines or impounding property, within 48 hours; in case of an appeal the higher court will also have 48 hours to decide into the case, according to the planned amendment.

According to planned amendment the state audit agency will no longer have the right to ask Central Election Commission (CEC) to bar a political party from running in elections. The law currently allows the state audit agency to make such appeal to the CEC if a party violated party funding regulations for multiple times.

The campaign group also wanted to change a provision in the criminal code which envisages fine or imprisonment for up to three years for accepting or demanding inducements, involving money or any other kind of benefit, for political purposes. This provision applies to the cases if a person accepts such inducements knowingly.

The ruling party agreed to only partially accept the proposal and, according to planned amendment, demanding inducements will no longer be regarded as a crime, but knowingly accepting such inducements will still remain crime punishable with up to three years in prison. But no punishment under criminal code will apply when inducement involves amount of less than GEL 100.

The ruling party refused to accept the campaigners’ proposal to remove from the law a provision, according to which if a group of individual donors has the same source of income (for example if they are employees of the same company) their aggregate donation to a single party should not exceed GEL 500,000 annually.

The package of new amendments to the law on political parties will also include a proposal on allocating additional state funding for some political parties; the proposal was voiced by the ruling party in January.